1. INTRODUCTION
The Board of Directors of the Company wishes to announce that on 16 August 2024, the Company entered into a Heads of Agreement (“HOA”) with Dhaya Maju Infrastructure (Asia) Sdn Berhad (Registration No.: 199601013646 (385996-H) (“DMIA”) for the proposed subscription by DMIA of a minimum of 1,032,720,000 ordinary shares in the Company, representing not less than 51% of the total enlarged issued share capital of the Company, at a subscription price of RM0.155 per ordinary share (“Proposed Subscription”).
2. INFORMATION ABOUT DMIA
DMIA was incorporated under the laws of Malaysia on 4 May 1996 under the Companies Act 1965 and deemed registered under the Companies Act 2016 as a private limited company.
As at the date of this announcement, the total issued share capital of DMIA is RM40,000,000 comprising 40,000,000 ordinary shares. DMIA and its subsidiaries (“DMIA Group”) are principally involved in the engineering, procurement, construction and commissioning of public mobility and transportation (railways and highways), railway engineering and technology and real estate development. DMIA Group is involved in infrastructure projects in Malaysia and India.
For the financial year ended 31 March 2023, DMIA Group recorded a turnover of RM1.031 billion.
3. PROPOSED EXEMPTION
In conjunction with the Proposed Subscription, DMIA and its persons acting in concert intend to seek an exemption from the Securities Commission Malaysia (“SC”) under Paragraph 4.08(1)(b) of the Rules on Take-overs, Mergers and Compulsory Acquisitions (“Rules”) from the obligation to undertake a mandatory take-over offer to acquire all the remaining ordinary shares and outstanding warrants of the Company not already owned by them upon completion of the Proposed Subscription (“Proposed Exemption”). In the event that the SC does not grant approval for the Proposed Exemption, DMIA and its persons acting in concert will undertake a mandatory take-over offer in accordance with the Rules.
4. SALIENT TERMS OF THE HOA
4.1 Proposed Subscription
The Company and DMIA (collectively referred to as the “Parties”) have agreed to enter into the HOA to record the principal terms and conditions of the Proposed Subscription, which shall be incorporated into a subscription agreement to be entered into between the Parties, subject to such other terms and conditions as may be mutually agreed between the Parties (“Definitive Agreement”).
4.2 Subscription Price and Deposit
The aggregate subscription price shall be calculated based on the total number of ordinary shares in the Company subscribed by the Subscriber, which shall not be less than 1,032,720,000 ordinary shares in the Company, multiplied by RM0.155 per ordinary share (“Subscription Price”).
Upon execution of the Definitive Agreement, the Subscriber shall pay an aggregate sum equivalent to 10 percent (10%) of the Subscription Price (“Deposit”) into the Company’s solicitor’s interest-bearing client account. The Deposit shall form part of the payment towards the Subscription Price upon completion of the Definitive Agreement.
4.3 Due Diligence
The Subscriber will, to the extent permissible by the applicable laws of Malaysia, conduct a due diligence review on PESTECH Group based on publicly available documents and/or information on PESTECH Group.
4.4 Negotiations Period
The Parties agree to negotiate and execute the Definitive Agreement as soon as practicable and within a period of two (2) months from the date of the HOA with an automatic extension of one (1) month or such other date as the Parties may agree in writing (“Negotiations Period”).
4.5 Exclusivity
The Company agrees that, for the period from and including the date of the HOA up to and including the last day of the Negotiations Period, the Company shall not:
4.5.1 enter into or continue, facilitate or encourage, any discussions or negotiations with any party relating to any equity fund raising exercises involving the Company; or
4.5.2 respond to any approach made by any party with a view to any of the same.
4.6 Binding effect
The HOA is not intended to be, and is not, an exhaustive description of the agreement, arrangement or understanding between the Parties relating to the Proposed Subscription and is subject always to the definitive terms and conditions to be set out in the Definitive Agreement.
4.7 Termination
The HOA will commence on the date of the HOA and terminate upon the earlier of:
4.7.1 the last day of the Negotiations Period; or
4.7.2 the date of execution of the Definitive Agreement concerning the Proposed Subscription.
5. RATIONALE FOR AND BENEFITS OF THE PROPOSED SUBSCRIPTION
The Proposed Subscription represents a strategic and synergistic collaboration between PESTECH Group and DMIA Group, aimed at enhancing competitiveness, offering more comprehensive solutions, enabling participation in larger-scale projects, and expanding the geographical footprint of both parties.
With the inclusion of DMIA Group, both parties will be able to expand their capabilities, offering more holistic and integrated construction and project management solutions and services to their customers by leveraging on each other’s strengths and competencies, particularly in rail-related infrastructure development.
Both PESTECH Group and DMIA Group have established strong track records in railway and rail electrification, highway, civil and electrical network infrastructures within the region, with expertise spanning across various aspects of railway projects, electrical power grid and renewable energy. The Proposed Subscription is expected to bring synergistic advantages, enabling PESTECH Group and DMIA Group to propel forward within the region.
6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED
None of the directors and/or major shareholders of the Company or any persons connected with them have any interest, whether direct or indirect, in the Proposed Subscription.
7. DIRECTORS’ STATEMENT
The Board, having considered all the terms and conditions of the HOA, is of the opinion that the Proposed Subscription is in the best interest of the Company.
8. DOCUMENT AVAILABLE FOR INSPECTION
The HOA will be made available for inspection at the Company’s registered office at No. 26, Jalan Utarid U5/14, Seksyen U5, 40150 Shah Alam, Selangor Darul Ehsan, Malaysia during normal business hours from Monday to Friday (except on public holidays) for a period of 3 months from the date of this announcement
This announcement is dated 16 August 2024.
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